From .NET 2.0 onwards a new and improved configuration management system has been put in place. You can now add a <connectionString> element to the config file and use it to place the connection strings to the database and then retrieve then in a consistent way in your application. It supports multiple connection strings too if you need to access multiple databases.
The config file looks like this:
<configuration>
...
<connectionStrings>
<add name="Default" connectionString="Server=(local);database=MyDatabase"/>
</connectionStrings>
...
<configuration>
From the .NET application you can access the connection string like this:
connectionString =
ConfigurationManager.ConnectionStrings["Default"].ConnectionString;
Just remember to add a reference to System.Configuration in your project and ensure that the code file is using the System.Configuration namespace as well.